Worst-Ever Quarter for Newspapers (Update)

Updated from 1:24 p.m.

Everyone knew it was bad out there, but maybe not this bad.

Figures that size up just how tough business has been for newspaper publishers were released sotto voce by an industry trade group last week, but word began to spread only over the last few days: Sales of print ads during the first quarter fell nearly 30% industry-wide, according to the Newspaper Association of America -- the worst drop since record-keeping began, in 1950.

To put it another way: Even assuming that sales remain flat for the rest of the year, print ad sales will have fallen to levels -- about $26 billion in total for the industry -- not seen since 1986.

The numbers were enough to make one want to rewrite the old saw: Freedom of the press belongs only to those who own one -- but who would want to?

It would appear that most investors certainly don't. Newspaper stocks were broadly lower across the board Tuesday. The New York Times(NYT Quote) fell 5.4%, Gannett(GCI Quote) was down 8%, the Washington Post(WPO Quote) slipped 4%, E.W. Scripps(SSP Quote) was off 10%, and Journal Communications(JRN Quote) was down 5.3%. News Corp.(NWS Quote), publisher of the Wall Street Journal and the New York Post among other titles, had inched higher by a few cents, or just over 1%.

"What we're seeing is an accelerating rate of decline across all advertising categories, which is beyond the worst-case scenario," said Edward Atorino, an analyst with the Benchmark Co., as he looked over the figures on the NAA web site for the first time. He paused to take another look, and then he said, "This is really horrible."